He won’t look very similar to it, but Norwegian chief executive Bjørn Kjos is sort of a child on his birthday.
He has a brand new plane to play with, the Boeing Dreamliner, but there’s a small problem. It has no batteries.
The hitch means Norwegian will be unable to launch its much vaunted long-haul Boeing 787 flights to Ny in April as planned (with Norwegian instead wet leasing two Airbus A340s to fly the route in the intervening time).
As Kjos explains: “We have taken a call to take these wet lease planes for 2 and 3 months respectively; we’re expecting delays of weeks, other than months, within the delivery of the Dreamliner.
“Boeing is operating incredibly hard to get the battery issues with that plane corrected. We now have faith in them and should order more Dreamliners at some point.”
Sky-high
Outside of this small blip, things are starting up for Norwegian, which has grown during the last decade to become the tenth largest carrier in Europe.
In two weeks, on April 1st, the Scandinavian airline will open its first base within the UK, at Gatwick Airport, offering 145 non-stop flights per week to 21 destinations.
The four aircraft based there’ll principally cater to the leisure market, ferrying cost-conscience passengers to sunny climbs in Spain, Italy and Croatia among others.
The move is a part of a much wider strategy from Norwegian to chop costs ever further.
Basing planes across Europe – with the carrier also opening operations in Malaga, Las Palmas and Alicante in Spain – allow for savings which are passed directly to passengers within the sort of cheaper tickets.
As Kjos continues: “There are going to be lots fewer airlines within the next decade and, as in every industry, it will become survival of the fittest.
“Our emerging competitors are the Asian low-cost carriers – Scoot, JetStar and AirAsia; it is going to be these carriers that fly passengers to the emerging economic destinations.
“Their costs are incredibly low – something we must match.”
New Aircraft
Another component to this cost cutting ambition, alongside geographical diversification, is a keenness for brand new aircraft, with Norwegian operating probably the most modern fleets in Europe.
It currently comprises 73 aircraft, including some 63 Boeing 737-800s and ten Boeing 737-300s.
Vitally, the common fleet age is simply 4.6 years, with 65 Boeing 737-800 and 100 Airbus A320neos also on order to interchange aging planes.
“Fuel efficiency is prime; the older the plane, the more they cost to run,” continued Kjos.
“We operate our aircraft, ideally, for seven years, keeping our fleet new and prices down.”
Norwegian estimates a brand new Dreamliner – of which it has eight scheduled for delivery over the subsequent three years – costs £5.7 million less annually to run than the ‘next best’ Airbus A330-200 because of fuel efficiencies alone.
Asian Markets
But it’s economic shifts which most interest Norwegian.
Having just opened a base in Bangkok, the carrier is betting big will probably be the industrial development of China and its rival Asian destinations so one can dominate the aviation sector over the arriving years.
“We might be carrying more Asian passengers out of Asian within the coming years,” explains Kjos.
“Today 90 per cent of the folk on our planes are Scandinavian, but this can decline sharply because the Asian economies develop and those there start travelling more.
“These are the folks we’ll be carrying, into Europe, from Asia, where presently the other is correct.”
But, while the longer term looks bright for the carrier, a lot of its competitors might possibly be facing a bleaker future.
Kjos adds: “The critical mass to make sure survival for an airline is growing always.
“Only many years ago it is advisable survive with five planes. Now it’s perhaps 40. In five years 50, after which within a decade that’s more likely to be 100.
“I see most of the smaller carriers disappearing, and never just on the low-cost end of the market. It is crucial we grow regularly, with new planes, to remain previous to the curve.”
Kjos had better start drawing up an inventory of presents he wants for next year.
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